WTI

Against a backdrop of rising OPEC+ supply and the potential for increased non-OPEC supply growth, mainly in the US, the crude oil forecast remains modestly bearish.

Oil prices plunged more than 10% off the monthly high with WTI now testing critical support at the 2025 yearly open. A multi-timeframe view of the oil technical charts.

The WTI barrel has already recorded five consecutive sessions of losses, with a depreciation of more than 5%.

With China’s improving economic conditions, demand concerns have reduced and in the short-term there is little risk of an oil glut forming, but the slightly longer term outlook is a bit murky with the potential for another supply war to emerge between US shale and OPEC+ producers.

Today Donald Trump has promised a 'new golden age' after he was sworn in as 47th president of the US. He declared that this era “begins right now," adding that America will be respected under his leadership as a "peacemaker and a unifier." But "We will drill, baby, drill."

Concerns over rising inflationary pressures were building as we headed towards the end of 2024. And the rapid acceleration of crude oil prices this year is doing nothing to alleviate those concerns.

The macro drivers that fuelled the Trump trade in Q4 may need some sort of booster to be sustained. And futures positioning is already displaying early signs of caution among EUR/USD and commodity FX bears.

Since the beginning of the year, WTI has increased its price by more than 8%, surpassing the psychological barrier of $75, previously regarded as the closest resistance.

Oil prices reversed from yearly open resistance this week with the bears aiming back towards multi-month range lows. A multi-timeframe view of the oil technical charts.

How could a potential Israel-Lebanon ceasefire impact oil prices and what are the key levels to watch?

Given the rise in non-OPEC supply growth, the OPEC+ will be under pressure to support prices. But the group has said that it will gradually restore withheld supplies after multiple delays. What’s more, we could see a sharp rise in US drilling activity under Trump’s plans. As a result, we could potentially see a boost in both OPEC and non-OPEC production by 2025 and beyond.

Crude oil prices came off their earlier lows by mid-day in London. But the path of least resistance remains to the downside, and I would be rather surprised if a breakdown does not occur in the coming days, barring a surprise supply-side shock.

Oil prices plunged more than 8% off the monthly high with WTI approaching critical support near the yearly lows. A multi-timeframe view of the Oil technical charts.

Highlighting demand concerns, the OPEC has today cut its oil demand growth forecast again. This is the fourth month in a row that it has done so. Weak oil demand in China, the world’s largest oil consumer, remains the primary driver of falling prices.

It was a lively day’s trade on Monday with Bitcoin reaching news highs above $80k and the USD index retesting its YTD high of 105.62. WTI crude oil and gold are on the brink of breaking key levels to the downside.

The immediate response in the commodities space to the Republican’s clean sweep victory has been a bearish one - especially for industrial metals. Copper and silver fell over 4% each, tracking weaker iron ore prices, while gold was off by around 3%. Crude prices fell too but came sharply off their earlier lows.

Oil prices plunged nearly 15% off the monthly high with WTI now approaching key technical support at the yearly lows. A multi-timeframe view of the Oil technical charts.